Nike's 4% Dividend Yield Hides a Looming Risk That Could Further Depress Its Share Price

Nike's stock price has fallen to a level where its dividend yield now approaches 4%. The 5-year average dividend yield for Nike is less than 2%, indicating a significant drop in share price. Nike's stock price hit new 52-week lows following a double-beat earnings report that included soft guidance. The company's recent earnings performance and guidance failed to reassure investors about its long-term stability. Geopolitical tensions, particularly in the Middle East, could force Nike to cut its dividend in the next 6 to 12 months. A dividend cut would likely further depress the stock price and increase downside risks for investors.